EUR/GBP: Bullish Butterfly Pattern with Confluence
EUR/GBP is currently exhibiting a bullish technical setup based on a harmonic pattern and RSI divergence, suggesting a potential upside move.
Harmonic Pattern Setup:
A bullish butterfly pattern is forming on the EUR/GBP chart.
Point D of the pattern, also known as the Potential Reversal Zone (PRZ), is nearing a key support area. This confluence strengthens the bullish case for a reversal at this level.
Bullish RSI Divergence:
Bullish RSI divergence is observed on both the 1-hour and 4-hour timeframes. This indicates that while price may be making lower lows, the RSI indicator is not confirming the downtrend, suggesting a potential weakening of bearish momentum.
Trade Recommendation:
Take Profit Levels:
Risk Management:
Always practice proper risk management. This trade recommendation carries inherent risk. Ensure your stop-loss is set as instructed and only risk a small percentage of your capital on this trade.
Notes:
Disclaimer:
This analysis is for informational purposes only and should not be considered as investment advice. Please consult with a qualified financial advisor before making any investment decisions.
Harmonic Pattern Setup:
A bullish butterfly pattern is forming on the EUR/GBP chart.
Point D of the pattern, also known as the Potential Reversal Zone (PRZ), is nearing a key support area. This confluence strengthens the bullish case for a reversal at this level.
Bullish RSI Divergence:
Bullish RSI divergence is observed on both the 1-hour and 4-hour timeframes. This indicates that while price may be making lower lows, the RSI indicator is not confirming the downtrend, suggesting a potential weakening of bearish momentum.
Trade Recommendation:
- Entry: Long EUR/GBP at 0.85450
- Stop Loss: 0.85240 (placed below the key support area and Point D of the butterfly pattern)
Take Profit Levels:
- TP-1: 0.85820 (targets the 1.618 Fibonacci extension of the XA leg)
- TP-2: 0.86030 (targets the 2.618 Fibonacci extension of the XA leg)
- TP-3: 0.86240 (open target, to be adjusted based on price action)
Risk Management:
Always practice proper risk management. This trade recommendation carries inherent risk. Ensure your stop-loss is set as instructed and only risk a small percentage of your capital on this trade.
Notes:
- The harmonic pattern and RSI divergence are strong indications, but not guarantees of a bullish reversal. Confirmation from price action, such as a break above the key support area, is recommended before entering the trade.
- Market conditions can change rapidly. This analysis is based on information available at the time of writing and may not be valid in the future.
Disclaimer:
This analysis is for informational purposes only and should not be considered as investment advice. Please consult with a qualified financial advisor before making any investment decisions.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.